Chapter 1: Introduction: from the managerial capitalism of the society of organizations to the investor capitalism of the ownership society
By financialization we mean basically the increased reliance on the finance market and finance capital to secure economic growth in the contemporary economy (Van der Zwan, 2014; Palley, 2013; Krippner, 2005). This shift in competitive capitalism from manufacturing and distribution of physical commodities as being the principal economic activity, to an economy essentially structured on the basis of abstract principles and the accumulation of wealth on the basis of non-tangible assets represents a wide-ranging shift change now being subject to detailed scholarly attention. Rather than starting with an analysis of finance industry statistics, clearly demonstrating the substantial growth of economic value generated in financial services (for example, Crotty, 2008), we can turn an eye to institutional changes. If the post-World War II era until the decline of the Bretton Woods system in the early 1970s (the Nixon Administration dropped out of the system in 1971) has been characterized as what Peter Drucker (1946) once spoke of as the “society of organizations” and Alfred Chandler (1984, 1977) refers to as “managerial capitalism,” the era after 1979 when Margret Thatcher was elected Prime Minister in the UK and embarked on a radical political change program, is perhaps better described as what Gerald Davis (2010) speaks of as “the ownership society” (a term widely used by the George W.